According to Bloomberg, T-Mobile’s parent company, Deutsche Telekom is open to negotiating a sale of its U.S. carrier, but only if an offer matches or exceeds its $35 per share valuation. The information was passed on to the site by “a person with knowledge of the matter.”

Senior management of the German company allegedly met in Berlin today, purely to discuss T-Mobile’s valuation. This news comes after Iliad had a bid worth $33 per share rejected earlier this month, and after Sprint purportedly backed out of its plan to merge with the US’ #4 carrier.

Nothing has been release officially by Deutsche Telekom, and I wouldn’t expect any plans to sell TMUS to become public any time soon. Both SoftBank and Deutsche Telekom were constantly reluctant to acknowledge a potential deal earlier this year. And DT only responded publicly to Iliad bid reports after the French telecoms company made its wish to buy T-Mobile known.

Whether or not any company big enough will come in for T-Mo is yet to be seen. But given the success of its past 5 financial quarters, and the rate it’s gaining customers, the Magenta-colored carrier is surely at its most attractive state in years.

About Cam Bunton

Cam Bunton, Managing Editor. A film school graduate from the University of Cumbria, UK, Cam's past life was in mobile phone retail. His passion for cell phones got him in to that industry, and then in to this one. A family man with three kids, he somehow manages to balance his work duties with family life and a runaway Twitter addiction. Follow him on twitter: @PhoneDog_Cam

Google is not gonna buy tmo. unless they wanna see the other 3 carriers stop carrying android phones.

JaswinderSinghJammu

I seriously doubt the other 3 can afford not to carry Android phones at least for now. 85% of the world is running Android. You do the math

maximus1901

Fine. My point is google is not gonna buy TMO. Ever. Or any other telecom. Those who suggest it are clueless. Look at Motorola acquisition.

FILA

Could T-Mobile USA buy their own selves?

dobber

In theory, yes.

A company can buy outstanding shares if they wish. For example, Apple is using their huge cash reserves to slowly buy outstanding shares.

This is a give and take relationship. A company can buy back shares to prop up its share price and by extension protect itself from friendly or unfriendly takeover. Buying back shares is generally considered a bad investment but this is the give and take relationship, sometimes it’s necessary or opportunistic to do so.

Shares of a company are sold to raise capital to do something. Not very different from a loan. The company can then pay shareholders (read, lenders) with a dividend (read, interest) and/or anticipate better market value later in the future.

Cam Bunton

Interestingly, Verizon did it (sort). Buying 45% of itself back from Vodafone.

dobber

Yup, very opportunistic. A win-win.

And TMUS swooped in and quickly bought 2.3B of 700MHz spectrum. Interestingly, by doing the opposite of Verizon: issuing new shares and selling bonds.

Paul Garrison

Customers should pool money and buy this thing.

bob90210

That’s a brilliant idea! People can pool their money together and own T-Mobile. Then everyone can share in the success. Maybe there can be some sort of market place where people can buy and sell their ownership.

Troy

Yeah, and then we have a million share holders fighting on the direction of the company.

maximus1901

Hmmm. some sort of market where people can buy and sell stocks? Like a stock market?

Moby

You can already buy as much T-Mobile as you want on the stock market. Ticker symbol is: TMUS. If you think it’s so great, put your money where your mouth is.

Paul

Sounds like a job for a kickstarter campaign.

JaswinderSinghJammu

Maybe John Legere could find financial backing from someone like Google and buy themselves from DT? Sort off like Verizon did with Vodafone

maximus1901

Except verizon is producing profit

Kidney_Thief

I’m gonna tell you a secret: so is T-Mobile.

maximus1901

From 2013q1 through 2014q1, tmo’s profits (losses) were:

$107, ($16), ($36), ($20), ($151)

In 2014q2 tmo’s profit was:

$391

with the following caveat taken from their own financial release:

“The positive variance in the second quarter of 2014 was primarily driven by a non-cash gain of $731 million from spectrum license transactions as described in the Other Events section.”

But let’s throw tmo a bone and count that as profit. In that case, for the past 6 quarters, tmo has a profit of:
$275mil. Over 18 months.

Do you know Sprint’s profit over 18 months? It’s probably far lower but Softbank doesn’t care because it’s in this for the long haul.

The VZW/ATT’s profits? Billions per quarter.

So, yeah that’s why DT wanted out.

Kidney_Thief

Sprint’s losses over the last six quarters amount to a shade under 2.8 billion (with a B), which makes T-Mobile’s seemingly paltry $275 million dollar profit look pretty nice. And let’s not, for a second, think that Softbank doesn’t care about profitability, or the fact that they’re hemorrhaging customers. They didn’t spend billions of dollars to acquire Sprint and Clear for funzies, they did it to make money, and soon.

calvin200

Does that loss include a lot of NV expenses? Then the customers who left because it was being fixed. They made themselves a deep hole. I think subscribers have stabilized now.

Kidney_Thief

Probably, but it’s not like T-Mobile was sitting idly by, either. They’ve been spending piles of cash on their network, too.

calvin200

I’m just saying that Sprint had a lot of catching up to do because they let their network go to heck and TMobile has been doing it right as of lately.

Seth

Unfortunately they aren’t. Last quarter’s “profit” was a one-off spectrum sale to Verizon. Most Analysts would pull that out as it was a one-off transaction that has nothing to do with T-Mobile’s ongoing operations.

Nearmsp

Legere was very interested in the Sprint merger and kicked out the Iliad offer in no time. I am happy DT is directly doing a negotiation rather than have the T-mobile US leaders muddy the waters.

monkeybutts

Legere has no real choice in the matter. It’s what shareholders want and DT is majority shareholder.

Adrayven

iliad upping from $33 to $35 or more isn’t a stretch.. wonder if they will come up with the extra to follow through…

MadJoe

Without know how many shares at that price they’re talking about, you’re completely in the dark as to how much more money that really is. Iirc, the Iiliad bid was pretty pathetic, so I’m guessing it’s a lot of shares.

Stefan Naumowicz

Their bid was reported to be worth $15 billion, so if the offer was $33/share and was worth that then $35/share would be about $15.9 billion

Seth

We do though. As Stefan said. Iliad was offering to buy 56.6% of T-Mobile or approximately 452 million shares at $33 dollars. That two dollar price difference multiplied by the number of shares involved would be $904 million. Slightly different way than Stefan to get to the same result.

The other issue here though is VG’s point above that DT presumably would like to sell their entire 66.7% stake.

VG

DT wants to sell ALL of its TMUS shares. Iliad only offered to buy 56.6% of TMUS shares, while DT owns 67% of TMUS. With about 807M total shares outstanding, someone would have to pay DT about $18.9B at $35 per share for DT’s 67% ownership (if my math is correct):

807M x $35 x 67% = $18.9B

Maximus

Actually, DT does not want to sell all of their shares. In the scrapped Sprint deal, they were going to hold on to a certain percentage (I forget what percentage exactly).

maximus1901

that’s only because it was gonna result in a reduction of competitors which is a positive for profits.

VG

Since that deal was never officially announced, nobody knows for sure (except perhaps the top management at Softbank and DT) what that deal was supposed to be. My bet is that DT wants out completely, and doesn’t want to hold onto any remaining TMUS shares on the hopes that their remaining shares will gain market value.

Seth

I think they do. There is a difference between accepting financing of a merger with partial stock in a combine Sprint/T-Mobile and keeping a stake in T-Mobile alone when you want out.

EndlessIke

If only there was some sort of public exchange where you could sell securities for money….

Seth

I fail to see what the stock market has to do with my post.

KijBeta

DT owns 535 Million shares (535,286,077), I have heard they want to sale all of it at a minimum of $35 per share. So the minimum purchase price is $18.7 Billion (18,735,036,950).

Because it’s not paying out dividends do any ascendance is on paper. And DT needs cash now to build fixed network.

Jay Holm

“ascendance”???????

vinnyjr

Too bad DT wants to sell T-Mobile USA, this company has a huge future. In one year their Network will be rock ass solid with all new LTE hardware in place. Whoever buys it I just hope to hell they don’t screw up what has been accomplished.

OH I am sure that yours is perfect, because your on Verizon or AT&T. But your using your data to look at Tmonews. And while your doing so, your data total is getting pretty close to going over, so good luck with those overages. :-)

maximus1901

I’m on TMO and have 4 lines but one is leaving because of in building coverage to cricket wireless.
Chillax.

Michael

coverage inside buildings will be fine once 700MHz A block rolls out and new phones become compatible

maximus1901

You think people will be happy to hear “buy another phone if you want better in building coverage” when they could densify their network to get at least 3G in buildings?

Derrick Ford

So the data cap and limit to only 8mbps down is ok with you on Cricket? Also, no tethering is allowed, by the way with Cricket.

Ordeith

The no tethering bothers me a little. but no more than T-Mobile’s tethering policies bothered you a few years ago when you were advocating work arounds like rooting your phone or flashing to a ROM T-Mobile couldn’t block. Those same techniques currently work on Cricket. It is actually much easier than it was on T-Mobile when you were rooting your devices to get something their policies said you couldn’t have.

honestabe

just sign into wifi with a lot of tmobile phones (and iPhone come next month) and coverage problem is solved!

JMF_mobile

Mine is fine inside office building with just HSPA+. About 5 or 6 Mbps down during the day. Fast enough to stream HD video and all that free music. Far faster than my coworkers on congested supposed LTE VZ and AT&T during same 8:00 to 4:30 peak times, who are lucky to get 2 and often are better off disabling LTE and falling back to 3G.

Wilfredo Martinez

DT is so desperate! I bet that after they sell T-Mobile, T-Mobile would become even more successful and then DT will look back and say “what were we thinking”? ….

Paul Garrison

I hope so.

LookBelow

Dammit DT, STFU with all this sell talk already. Let TMUS do its thing and watch the company rise to the top!!

maximus1901

From 2013q1 through 2014q1, tmo’s profits (losses) in millions were:

$107, ($16), ($36), ($20), ($151)

In 2014q2 tmo’s profit was:

$391

with the following caveat taken from their own financial release:

“The positive variance in the second quarter of 2014 was primarily driven by a non-cash gain of $731 million from spectrum license transactions as described in the Other Events section.”

But let’s throw tmo a bone and count that as profit. In that case, for the past 6 quarters, tmo has a profit of:

$275mil. Over 18 months.

Do you know Sprint’s profit over 18 months? It’s probably far lower but Softbank doesn’t care because it’s in this for the long haul.

The VZW/ATT’s profits? Billions per quarter.

So, yeah that’s why DT wanted out.

TechHog

Verizon and AT&T aren’t only cellular carriers like T-Mobile and Sprint are. They obviously make significantly more than the smaller carriers due to their sizes and prices, but either way a direct comparison of profit for the whole company makes no sense whatsoever.

honestabe

I wonder how much of their profits comes from gouging their customers with overage fees

xmiro

You missed the part about $5.3 billion of CAPEX going to the network upgrades

maximus1901

I didn’t miss it that’s already accounted for. Obviously TMO’s profit would increase if it didn’t spend on CAPEX. That’s irrelevant. Every carriers profit would go up with no CAPEX.

I took the figures directly from TMO press release docs.

xmiro

it’s not irrelevant, just like it’s not irrelevant when it comes to say Amazon. The revenue isn’t going in a black hole, or some dump, it’s being spent on the business to grow it.

In the case of T-Mobile, Legere is burning cash to fix the network he inherited from the inept morons who were in charge before him.

If DT didn’t bleed T-Mobile US profit for years, and actually invested in its network, Legere and Neville would now be focused on LTE instead of doing a myriad of things one of which is upgrading 10-year old equipment that hasn’t been touched, probably even seen a human, in years.

Seth

And Sprint is spending $8 billion in CapEx. Every carrier has CapEx. This is a CapEx intensive industry especially with carriers deploying new bands, etc. CapEx is a legitimate expense to count against earnings.

Michael Lynady

Tmo is riding high but there seems to be a concern about future cash flow to get more done – sprint has the $ but do they have the time?

Eric

For the fact that DT still wants to sell TMO USA after all this success something must be going on that we clearly don’t know…It just seems so strange to abandon something that is starting to do so good,

Cam Bunton

It’s more about what’s going on in Europe. DT is finding competition extremely difficult over here, so, it needs to cut off its American limb so it can focus its attentions over here and invest in EU infrastructure etc.

S. Ali

Reuters reports a source saying that $35 is too low.

xmiro

DT wants money for it’s European operations. They just lost an opportunity to merge with another German carrier and are probably looking to buy up other European carriers since Europe, unlike America, has dozens of wireless operators in all the countries

calvin200

Yes the competition and expense of having coverage in more places, cost of getting more spectrum, and taking care of business at home. The money to rule the wireless industry is retreating to Germany.

notyourbusiness

T-Mobile US has finally been making real money and shaking up the competition left and right. Deusche Telecom is run by fools if it truly sells it.

Also, why did I get redirected to another article while I was trying to type this??? Happened twice. The third attempt at posting this, I had to click the X in my browswer to stop the page from refreshing/redirecting me. Quite annoying and unnecessary. Edit: It just happened again on the main page. I was repeatedly redirected to an article about Cablevision from three years ago. Seriously, what gives???

Fight for Freedom

Because ALL Deusche Telecom wants to do.. and has wanted to do for the last 4 years.. is sell off T-Mobile USA to put them money back into its dying business in Germany. They want out of the US telecom market.

Winski

The ‘… person with knowledge of the matter” story is A MADE UP LIE. Bloomberg is in the same business as Jamie Diamond and the Russians that made up a lot of the Hyper-Velocity trading scheme that still goes on today. They all are in the business of manipulating retail investors and the delivery of the never-ending torrent of sewerage used to mis-inform and manipulate the rest of the un-washed.

If you believe ANY of this barrage of lies, then they’ve done their job…

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